From Mandatory Disclosures to Stakeholder Expectations - Navigating the New ESG Reporting Landscape
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August 1, 2024
As a CFO, you're likely laser-focused on optimizing financial performance and driving shareholder value. However, ignoring environmental, social, and governance (ESG) factors could be leaving money on the table and exposing your company to material risks.
On August 2, 2024, the Securities and Exchange Commission (SEC) announced a pivotal proposal for joint data standards under the Financial Data Transparency Act of 2022 (FDTA). The proposal is intended to improve accountability and transparency by establishing technical standards for data submitted to various financial regulatory agencies.
Equilar recently released its first “Cybersecurity Disclosure Trends” report, based on analysis of the proxy statements and Form 10-K’s of the Equilar 100 companies (the 100 largest US companies by revenues), from 2019 through 2023. This inaugural report supplements their annual “Preparing for Proxy Season” Reports, DFIN was asked to provide independent commentary for the report, adding insight and advice to the numbers.
Key data in the report includes:
DFIN’s second quarter earnings, released this week, demonstrate the strength of our business strategy to become the leader in deal-making, regulatory and compliance software.
We achieved record quarterly software solutions net sales of $85.6 million, an increase of 13.1%, or 14.4% on an organic basis from the second quarter of 2023. Software solutions net sales accounted for 35.3% of total net sales, up from 31.3% in the year-ago quarter.
Now, it’s smaller companies’ turn.
In July 2023, the Securities and Exchange Commission (SEC) announced new rules designed to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance, and incidents by public companies.
The first set of businesses required to comply were large reporting companies, which were given a start date of December 15, 2023. The next group up are smaller reporting companies, which, beginning on June 15, must start complying with these rules. That means these businesses should be prepared to do the following:
There are many different types of financial statements, each with its own requirement and purpose. Yet, they are often lumped in as a category. If you do not know the differences in financial statements, it is easy to get lost in the sea of paperwork. This guide to the 4 major financial statements provides clear-cut answers to the use, purpose and audience for 4 types of financial statements you will most commonly encounter.
Board reports convey key information about a company's performance to its board of directors, so they can make informed decisions. While this sounds straightforward, boards sometimes do not fully understand the financial reports they receive. As a result, their ability to make effective decisions is hampered.
Last week’s FDTA Forum 2024, hosted by the Data Foundation in partnership with DFIN, gave industry participants the opportunity to talk about a subject on everyone’s mind: the Financial Data Transparency Act, which will make financial information more accessible, more uniform, and more useful to all stakeholders. And people had a lot to say.
It’s no exaggeration that financial professionals in both the public and private sectors are eagerly anticipating the expected proposed joint rules that establish data standards for the collection of information.
The Best AI Prompts for Finance & Financial Reporting
See how ActiveDisclosure by DFIN and Diligent’s ESG reporting solution helped Benchmark with regulatory compliance by sharing ESG information with stakeholders via annual sustainability reports & SEC filings. Hear from Steve Beaver, General Counsel & Chief Legal Officer at Benchmark.